Returning on reduced hours, phased returns and sick pay

An employee who agrees to a phased return to work on temporarily reduced hours will lose out financially unless an agreement can be reached to pay sick pay for the working hours the employee is not yet fit to perform. This could involve the employee receiving full pay for a period while working reduced hours. In some workplaces where unions are recognised, collective agreements have been negotiated to provide a financial cushion in the event of a phased return from long-term sick leave. The DWP Fit Note Guidance says: “If your employee returns to work on reduced hours, you should consider whether your employee may be financially disadvantaged. In such cases, you may decide to pay sick pay for the hours not worked, or to pay full pay despite the reduced hours”.